Senate Blocks Trump’s Deal With ZTE

June 12, 2018

(FILES) In this file photo taken on May 2, 2018 The ZTE logo is seen on a building in Beijing.The United States and China said on May 19, 2018, they had reached consensus on measures to “substantially” reduce the US trade deficit with Beijing by “significantly” increasing its purchases of US goods, but offered few details. / AFP PHOTO / WANG ZHAOWANG ZHAO/AFP/Getty Images

In a major rebuke to President Donald Trump, the Senate has adopted a measure that would block the administration’s deal with Chinese telecom giant ZTE, pitting the president against Congress on what many senators say is an issue of national security.

The Senate’s move comes less than a week after the administration struck an agreement with ZTE that would have kept the telecom company engaged in the U.S. market.

The president’s deal with ZTE would have forced the company to pay a $1 billion penalty, reorganize its company and allow U.S. compliance officers in exchange for being able to sell its products inside the U.S.

But the bipartisan senate amendment, which has been added to the must-pass National Defense Authorization Act, would essentially kill that agreement by retroactively reinstating financial penalties and continuing the prohibition on ZTE’s ability to sell to the U.S. government.

Sen. Tom Cotton, R-Ark., who is one of the co-sponsors of the measure, said that the amendment would likely put ZTE out of business.

“ZTE said they couldn’t remain in business, or at least not remain anything other than a cell phone hand-held business, if the denial order from March was in effect. And this would essential put the denial order back into effect,” Cotton told reporters.

The telecom company is considered by the intelligence community to be a mechanism for espionage by, in part, selling phones in the U.S. that can be tracked and enabled to steal intellectual property.